A beautifully written and powerful story that ties the current financial crisis to a cycle of politics as old as the Republic, and to a pathology in our politics that is as profound as any that our Republic has faced. We are far away from solving that crisis, and hopelessly far from even understanding how we could cure this pathology. Required reading for the President, and anyone else who cares for this Republic.
Lawrence Lessig, Professor of Law and Director of the
Edmond J. Safra Foundation for Ethics at Harvard University
Too many discussions of the Great Recession present it as a purely economic phenomenon–the result of excessive leverage or errors of monetary policy or algorithms run mad. Simon Johnson was the first to point out that this was and is a crisis of political economy. His and James Kwak’s analysis of the unholy inter-twining of Washington and Wall Street–a cross between the gilded age and a banana republic – is essential reading.
Niall Ferguson, Professor of History at Harvard University,
Professor at Harvard Business School, and Author of The Ascent of Money
13 Bankers describes the rise of concentrated financial power and the threat it poses to our economic well-being. Over the past three decades, a handful of banks became spectacularly large and profitable and used their power and prestige to reshape the political landscape. By the late 1990s, the conventional wisdom in Washington was that what was good for Wall Street was good for America. This ideology of finance produced the excessive risk-taking of the past decade, creating an enormous bubble and ultimately leading to a devastating financial crisis and recession.
More remarkable, the responses of both the Bush and Obama administrations to the crisis–bailing out the megabanks on generous terms, without securing any meaningful reform–demonstrate the lasting political power of Wall Street. The largest banks have become more powerful and more emphatically “too big to fail,” with no incentive to change their behavior in the future. This only sets the stage for another financial crisis, another government bailout, and another increase in our national debt.
The alternative is to confront the power of Wall Street head on, which means breaking up the big banks and imposing hard limits on bank size so they can’t reassemble themselves. The good news is that America has fought this battle before in different forms, from Thomas Jefferson’s (unsuccessful) campaign against the First Bank of the United States to the trust-busting of Teddy Roosevelt and the banking regulations of the 1930s enacted under Franklin Delano Roosevelt. 13 Bankers explains why we face this latest showdown with the financial sector, and what is at stake for America.
Simon Johnson and James Kwak provide the best explanation yet for how the smart guys on Wall Street led us to the brink of collapse. In the process, they demystify our financial system, stripping it down to expose the ruthless power grab that lies at its center. If you want to understand how Wall Street captured Washington and how it tenaciously hangs on to that power, read 13 Bankers.
Elizabeth Warren, Professor of Law at Harvard Law School and
Chairwoman of the TARP Congressional Oversight Panel
If the wads of money you’ve stuffed into your mattress for safekeeping don’t keep you up at night, Simon Johnson and James Kwak’s 13 Bankers will–a disturbing and painstakingly researched account of how the banks wrenched control of government and society out of our hands–and what we can do to seize it back.
Over the last 50 years, the FAA, the airline manufacturers, and the airlines worked together to make a highly complex air travel system more efficient and much safer. If you’ve ever wondered why, in contrast, our financial regulators and banks made our financial system less efficient and much more dangerous, you should read this book.
Paul Romer, Senior Fellow at the Stanford Center for International Development and the Stanford Institute for Economic Policy Research